Italy is organizing a small package of pandemic aid without further deficits

Italy is organizing a small package of pandemic aid without further deficits

Italy’s government is working at a spending package that will not need reexamining the budget to grow the shortage, individuals familiar with the matter said. The measures could be reported as soon as the next week and would carry targeted relief to sectors hit by the surge in Covid-19 infections, for example, the tourism, individuals said, asking not to be named examining confidential plans. The package will likewise be utilized to refinance furlough programs for laborers hit by the pandemic.

This would put Draghi at odds with the some of the parties of his fractious majority, which have been pushing for more spending. League leader Matteo Salvini on Wednesday called for a “sizable” expansion of the deficit to shield households from higher energy bills.

To fund those plans, Prime Minister Mario Draghi’s government is leaning toward relying on existing resources, currently estimated at around 2 billion euros ($2.3 billion), without asking parliament to authorize fresh borrowing, the people said.

Measures to cushion poorer families from the impact of surging power prices, which can’t simply be covered by shifting existing resources, may be introduced at a later date, potentially after the election of a new Italian president.

Italy’s government is entering a delicate phase as lawmakers prepare to elect a new president from Jan. 24. Draghi himself is considered a leading candidate for the post, and this is seen as weakening his position vis-a-vis the parties backing his premiership.

La Stampa reported earlier this month that the extra spending — including support on energy — might amount to as much as 20 billion euros. Spokespeople for Draghi’s office and the finance ministry declined to comment.

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